Solar Equipment Standards To Benefit Small Buyers

An employee inspects solar panels, part of a solar power microgrid, in the village of Dharnai in Jehanabad, Bihar. (Photographer: Prashanth Vishwanathan/Bloomberg)

Individuals and institutions planning to set up solar rooftops stand to gain from the government's new standards for solar power equipment as it's expected to improve quality.

Retail consumers and the residential housing sector will benefit as it wasn't possible for them to judge the quality of panels, Sanjeev Aggarwal, managing director and chief executive officer of Amplus Energy Solutions Pvt., a solar rooftop project developer, told BloombergQuint.

The new standards for solar photovoltaic modules will come into effect in a year, the Ministry of New and Renewable Energy said in a recent order. Nearly 85 percent of the solar panels used in the country are imported from China, a report by renewable energy consultancy Bridge To India said. Solar panels account for more than half of a project's total costs, according to Bloomberg New Energy Finance.

As per the order, any manufacturer who stores, sells or distributes solar photovoltaic modules will have to file an application with the Bureau of Indian Standards for obtaining the ‘standard mark'. This came after the Parliamentary Standing Committee on Energy raised concerns over the quality of equipment used in the solar projects.

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There's no real implication for utility-scale projects which procure modules of International Electrotechnical Commission standard already or can have them tested at accredited laboratories, said Kameswara Rao, partner and leader (energy, utilities and mining), PwC India.

Buyers from rural areas, colleges, institutions who want to have solar rooftops, farms will benefit from these set of standards because they don't know about the quality of solar PV modules, he said.

As the volume of smaller, subsidised applications grows, it becomes important that solar panels, whether imported or locally sourced, stand up to a reliable standard. This will avoid a potential credibility crisis.

Kameswara Rao, Partner - Energy, Utilities and Mining, PwC India

There could be some concerns for international manufacturers who will have to get the modules certified by the Indian regulator.

It's important that the stated criteria for certification should be followed, said Amplus' Aggarwal.

We should have a level-playing between the imported models and domestic manufacturers. It should not be used as a trade barrier and provide everybody the same opportunity for certification.

Sanjeev Aggarwal, Chief Executive Officer, Amplus Energy Solutions

The process for applying for certification by the developers should also be defined so that international manufacturers can apply early before the notification comes into effect, he said.

The standards will ensure that domestic manufacturers improve quality to match imports, said Sundeep Gupta, vice chairman and managing director, Jakson Group, an energy and engineering solutions company.

There could be some cost escalation initially for new solar installations but it will be beneficial in the long run because operational and maintenance costs will reduce due to better quality products, he said.

The national specifications are also expected to evolve away from IEC standards. “In future, we may deviate from IEC standards and localise for tropical conditions. In that sense it's an important first step,” said PwC's Rao.